–and the parents loan sky high for that year?
Is this a federal regulation for freshman yr? I have seen it said that the avg student college debt is something like 32-34k or something. But $5.5k x 4 yrs = $22k; so 5.5 must not be the max per yr.
What are the maximum student loans per year?
EDIT
Perhaps my answer is somewhere in the following…
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
But when I did the math for max loans per yr ( 5.5 + 6.5+ 7.5 +7.5 = 27k), this is way under that nat’l avg of 32-34k. So where and how do students get more loans?
So I must be missing something. Perhaps the distinction between subsidized and unsubsidized? not sure what these mean.
So what other loans are available to students besides the one that caps at 27k? (PP are parents’ loans and so do not answer this question.).
Those numbers are correct for each of the 4 years. The average could include Perkins loans which not everyone gets. Also, if a parent applies for a Parent Plus and is denied, the student can get $4k extra in unsub loans I believe. That’s the independent student amounts which could be raising the averages. The averages could also include private loans in the student’s name but cosigned by parents or others.
For sub loans the government pays the interest while the student is in school, unsub accrues interest while the student is in school.
I also think those averages may be for those that have any debt and not include those who graduate debt free by attending affordable schools.
Since the 4 year maximums don’t reach the aggregate limits, students needing an extra semester can still qualify to borrow. So, there’s this, independent students (who can borrow more), Perkins, and private loans… all giving you a higher higher than the the 4 year max allowed for just direct loans.
I think the average for a student taking all 4 years of loans is $29-30k, which would be the $27k in actual principal borrowed plus interest accrued on the unsubbed part ($2000 per year minimum).
Why $5500? That’s just what the limit was set at when the limits were set. Might be more than enough at a CC and not nearly enough at a private school. It is a ‘one size fits all’ plan when clearly it fits very few.
thanks for the replies and the clarification between sub and unsub. I was going to ask ‘how does the student get a Perkins loan?’ Googling, it said that you must exhibit exceptional financial need. I guess $68k per yr HH Agi family of 5 is not this level of need as this was not offered to my niece.
Also, the following site seems to put Perkins under this $27k max loan regulation for an undergrad… So even if they cd get a Perkins it wd not have increased their student loans.
https://studentaid.ed.gov/types/loans/perkins
So what other student loans of the variety that can be paid back after graduation are there for students? As we know with averages, there wd be some undergrad loans of 40, 50, 60 etc (and some loans of 2, 3, 5k). Private loans was mentioned above. ANy 411 on private loans? What are good ones? with good rates, payment deferment, and underwriting criteria that allows them to be offered to people who really need them?
The typical saw for private (bank) loans , of course, is : the banks will only give loans to people who do not need the loan;
Here is something on fed v private loans, but links to private loans. surprise - fed loans are better that is the good news. The bad news is that it is not enough to get the kid to school.
https://studentaid.ed.gov/types/loans/federal-vs-private
Some more info on private
http://www.finaid.org/loans/privatestudentloans.phtml
Perkins loans are awarded by the colleges. The schools receive limited money for this purpose. The school determines the threshold for “low income” at their school for this award.
The limits for fed loans are set where they are probably because the total is considered a reasonable amount of debt for a student to take on by themselves. More loans than that at least requires parents to get involved, either taking on Parent Plus loans themselves(or at least applying for them) or cosigning private loans. If the federal limits aren’t enough to get your niece through college, I think your niece and her family need to seriously examine whether there are more affordable schools as alternatives. Taking on more debt than the federal limits is dubious depending on the school, major, expected graduate income, other family financial issues and other factors.
‘I think your niece and her family need to seriously examine whether there are more affordable schools as alternatives. Taking on more debt than the federal limits is dubious …’ – there are two loans being talked about here: student and parents. the former has limits ; the latter does not (limit= COA).
If they stick with the limit of the student loans they would have to pick a college that cost 27k over 4 yrs. yes, that would yield a CC. I cked the local community college and a 2 yr AA degree = $18k. PLus it does not have her desired area of study.
Her desired line of study is game design and development and interactive media soemthing that is not availabel at the local CCs
One option is do the gen eds with the cheaper CC and then do the game development later. It is a lot more complex , tho, as one has to do a mapping of the req’d gen ed classes of the CC w/ the game college and make sure they transfer. It is hard enough to find the right courses to stay on track for graduation for the single college approach.
here is her universe…the only ‘100 pct meet need’ is USC and this is not an option due to geographical proximity and less than standardized score to get in
http://www.princetonreview.com/press/game-design-press-release
OTOH - as you can see, this is more of a pre - professional line of study and so it might be a good investment.
Students get huge loan balances because parents foolishly cosign on those loans. I read in a local paper about a young lady with $80K in debt for a degree in animal science and then decided she didn’t want to become a vet. She is now working a full time job, a part time job, and taking classes to become an ultra-sound technician. The high debt is because her parents cosigned her loans. Don’t become “that” parent.